What Is Financial Exploitation?

Financial exploitation is the illegal or improper use of another person's resources for personal profit. Many people, especially vulnerable adults who lack the physical or mental capacity to provide for their own daily needs, have been financially exploited not only by con artists who were strangers, but even more common by people they knew - paid caregivers, neighbors, even relatives. In fact, relatives are the most frequent exploiters.

Examples of financial exploitation include: making unauthorized withdrawals from a bank account; cashing checks that should have been deposited; forging a person's signature; having a person establish a joint banking account, then taking large sums of money out of it; and tricking a person with a memory problem into writing multiple checks for the same purpose.

Financial matters can be confusing. If you have questions or need assistance, ask for help from your bank, a trusted family member, clergy member, social worker or other professional.

What You Can Do to Avoid Problems

Document financial arrangements. By putting financial arrangements in writing, you not only protect yourself but you also reduce the likelihood of future misunderstandings of legal proceedings. Put all financial instructions in writing and be specific. Keep complete financial records of all transactions. Put all financial documents in a safe place.

Don't give away property. Before you enter into an agreement for lifelong care, discuss the arrangement with a trusted friend or advisor. Document the agreement and specify the compensation, if there is any, paid to the caregiver. If there is someone helping you with your personal finances, get a trusted third party to review your bank statement.

Get to know your banker, attorney and financial consultant. Establish relationships with the professionals who handle your money. They can help detect changes in your financial activity that may signal a problem.

Be cautious of joint accounts. Both parties are equal owners of the account and both have equal access to the money. Ask your bank about alternatives like a convenience account or Power of Attorney account, which allow others to do banking for you, but do not make them co-owners of anything in the account.

Include a compensation clause in any power of attorney. Before you assign a power of attorney, be sure you understand the scope of the agreement and the authority you are giving to your agent. Know the person to whom you are giving this authority, and, most importantly, make sure you have absolute faith in their integrity. Also, specify the compensation, if any, to be paid to your agent.

These tips will help you protect your money:

Use direct deposit for your checks.

Don't sign blank checks allowing another person to fill in the amount.

Don't leave money or valuables in plain view.

Don't sign anything you don't understand.

Protect your money. The bank may be able to protect your money by arranging your accounts to control access to your funds.

Be aware of scams. If it sounds too good to be true, it probably is.

Cancel your ATM card if you don't use it.

Don't give anyone your ATM PIN number.

Check your bank statements carefully for unauthorized withdrawals.

Be cautious of joint accounts.

Build good relationships with the professionals who handle your money.